Tag Archives: business

Niche Retailer TrollAndToad.Com Makes Inc. 5000 Again

Clicks and mortar retailer TrollAndToad.com came in at #1063 in the Inc. 5000  fastest growing private companies in America for the second year with 285% revenue growth over the last three years. TrollAndToad.com is a the world’s largest retailer of collectible games. That is the very definition of niche.

So these guys are successful retailers. They are even more successful story tellers to attract customers, press buzz and decent management talent to the company.

Their website encourages sharing across the range of social media networks their customers may like. They have dedicated themselves to getting their story out.

I’m impressed because they get it. Sadly many companies do not. So the message is

  1. execute the business
  2. tell the world to attract customers, staff and media.

Successful businesses must do both, well.

TrollAndToad.Com’s also credit their growth and success to  acquiring the most talented people in the industry to oversee its growing divisions.  In an effort to rapidly expand its brick-and-mortar retail endeavors, the company has brought hobby retail store veteran Marcus King on board to chart and direct the course for this initiative.

King was a Board Member of the GAMA Retail Division (GRD) for many years. He also served as Vice President of the Game Manufacturers Association (GAMA) Board of Directors, helping to oversee all the activities of that body.  “I will be working with, and in, the newly opened Richmond, Kentucky store,” King explained, “and opening more Troll And Toad Retail and Tournament Centers — first in Kentucky, then across the nation.”

So they hired an expert. Some  companies try to do everything in-house especially when they are not good at it.

I knew a CEO who wanted to write every press release despite being a poor writer. I mean bad grammar, limited vocabulary and shocking spelling. He was smart, but had no talent with words. This industrial company boasted they put 20 press releases out in their best year. They needed to put 2000 releases out and engage with journalists in covering industries. Instead they worried about cost. What did it cost for the CEO to spend two hours on a press release? If he doesn’t add $400+ per hour in value, fire him.

Google Analytics Track Adsense

Bottom line up front: Create a new Google Analytics account for every website domain, unless you want to track your Adsense clicks in Analytics.

After attending Affili@SYD 2011 last week, I decided to review all my web properties.

I don’t consider myself an affiliate marketer, I’m more an e-commerce and traffic guy. But I’ve had moments of success over the years.

The first step of the review is to benchmark my properties and get a picture of their current state. Some have been sadly neglected over the years so I’m dusting them off and giving them a lick of TLC. Google Analytics provides some wonderful benchmarking tools for this.

Βest-practice is a one  Google Analytics account per domain. Any subdomains can then be set up as a filter or a profile under that account. My old web properties were created with a new profile under my main account.

Analytics profiles cannot be moved between accounts. A separate account for each property lets me sell a property and “unhook” its Analytics without losing all the historical data.

I also want to run  Google Adsense on the revitalized domains and track ad effectiveness through Analytics.

Unfortunately Google currently allows only one AdSense account linked to one Analytics account.

So for now it means the smaller properties must reside in my main Analytics account if I want to track Adsense with Analytics as I don’t want multiple Adsense accounts.

Once a property gets traction and significant traffic on it’s own I will then create a new Google Analytics account for it. I’ll disconnect the history and lose the ability to track it’s Adsense data in Analytics, but I’ll be better able to use the reports in Adsense with more traffic.

Business Model for News

Rupert Murdoch has created a stir with his intent to charge for content. Dave Earley wrote a great piece at Earley Edition explaining how it won’t save news media’s business model.

What is the core business of news media? They are not in the business of “reporting the news”. News media’s business is to aggregate an audience to deliver to advertisers. That is why celebrity tabloids sell – the perceived quality of the “product” only affects the demographics and size of the audience. But in reality the audience is the “product”, journalists and producers are the manufacturing team. The sales team are supposed to be the rain makers. But news media believes their own manufacturing-oriented PR that their business is “the news”.

If news media companies are to thrive under a pay-for-content business model they must now do two new things well for sustainable competitive advantage. Firstly they must deliver compelling content, now mixed with rights management and security that does not interfere with the reader experience. Secondly they must become expert subscription marketers – better than Time Life or Readers Digest. Because the internet is littered with the corpses of companies who believed “if you build it, they will come”. If your business depends on paid subscription you had better become outstanding at the skills to deliver subscriptions. Dave Earley said

It is worrying that users will now be made to pay for news simply because marketing departments are unable to make online advertising work.

Sadly this is typical of sales and marketing reactions in a mature market, it always looks easier to chase the next big thing rather than get great at your core business. If their marketing departments can’t sell online advertising (B2B) how are they going to develop the skill to convince people (B2C) to pay for something they’ve previously got for free? I wouldn’t take that bet.

News media is like the buggy whip manufacturers complaining their markets are shrinking because cars have replaced horse-drawn carriages. Nobody promised newspapers a perpetual license to make money. Evolve or die.  Get good at your real, core business.

Rupert, baby, deliver an audience to your customers.

Strategic Mergers and Acquisitions for Fast Growth Firms

I’m working on a “How To” series on Strategic Mergers and Acquisitions for Fast Growth Firms. It covers the tools, skills and processes needed by firms pursuing acquisitions as a tempting path to growth. This is an audio presentation accompanied by detailed notes, checklists and templates.

Strategic Mergers and Acquisitions for Fast Growth Firms, Series 1 – Buy Side, Capturing Value Beyond Price

Highlights from Series 1: Buy Side

  • The M&A Process from the buy side
  • The Wealth Esteem M&A Checklist Methodology
  • Special types of M&A deals
    • the true “merger”
    • “Bolt-on” acquisitions
    • Vertical and horizontal integration
    • Diversification
  • M&A target identification and deal flow
  • Managing the M&A Project
  • Key roles and members of the M&A team
  • Valuing the business
  • M&A Negotiation
  • Earnouts
  • Financing the deal
  • M&A Due Diligence
    • Finance
    • Legal
    • Intellectual Property
    • Human Resources, learning & development
    • Marketing
    • Sales
    • Manufacturing and operations
    • R&D and innovation
    • Logistics and distribution
  • Integrating the Acquisition – the forgotten part of the Deal
    • the whole is greater than the sum of the parts
    • mitigating risk
    • integration planning
    • measuring integration success
    • practical integration improvement
  • Good to great: Post-Acquisition Review

Coming soon: Strategic Mergers and Acquisitions for Fast Growth Firms, Series 2 – Sell Side, Your Exit Strategy.

Telstra and the National Broadband Network

IF you believe mainstream media, Sol Trujillo is the most unpopular man in Australia and Telstra is the most unpopular company [full disclosure: I am the beneficiary of a Telstra shareholding]. I don’t think I’ve ever forgiven Telstra for its monopolistic behaviour back when it was Telecom and I didn’t have a choice of carriers.

When Telstra was booted out of the National Broadband Network tender process for submitting a non-compliant tender, pundits were eagerly predicting Telstra’s demise or other “dark and awful consequences”. Telstra had submitted a tender that suited their business model, aspirations and view of the future. They signaled the only way they’d consider lining up for the $4.7 Billion AUD the government was offering. I congratulate them for having the balls to stick to their guns.

Today the Federal Government announced none of the remaining tenders were “value for money” and instead would form a new company to build a fibre to the home network to 90% of Australians. Much ink will be spilled in the future on this deviation from the tender outcomes requested, namely 98% fibre to the node.

Here’s my quick take home analysis:

  1. Submitting a tender of this size and complexity is a very expensive exercise.
  2. No tenderer was awarded a contract despite complying with the guidelines.
  3. Telstra spent a little money outlining the conditions they would accept.
  4. Who looks smart now?

This seems like a brilliant use of game theory by Telstra. Sol and his team have been called arrogant and out-of-touch, I think they protected their shareholders interests well.

Just because a deal is on the table doesn’t mean it’s always wisest to take it.

Culture of Secrecy

How can companies still think what they do is top secret. Note I’m not talking about intelligence, research or military organizations here. I mean general competitive businesses in a competitive marketplace.

How many of the projects we’ve been sworn to keep secret really needed or benefited from that? How many top secret projects failed to launch? Again I’m not talking about early gestation with limited resources, there’s a time and place for keeping something under wraps until it’s time – however even then most people keep it too secret for too long.

Enthusiasm is the hardest attribute to sustain in any endeavor.

I’ve found many companies with a Culture of Secrecy are really staffed by people avoiding scrutiny or responsibility. If they don’t say what they are going to achieve, they can’t be held accountable when they miss.

Everybody misses from time to time. Me included. Looking at what went wrong often more valuable than succeeding by a fluke.

Fear is the other great cause of the secrecy cult. Every manager worthy of the title has had an employee leave to work for a competitor. Weak managers of weak businesses respond by limiting the flow of ideas and information to the team that drives the business. They hope a defection cannot harm them again, without reviewing  if that harm was more than a bruised ego. This is overprotective thinking. When you fell over as a baby while learning to walk, you tried again until you mastered it. If a business is only as good as its secrets it has no better competitive advantage in the marketplace. Are there low barriers to entry for competitors?

Find your competitive advantange. That may be worth keeping close to the chest, but I doubt it. Your success flows from knowing what you do better than anyone else – what others cannot take from you.

Think of great global brands and great businesses like Coca-Cola, American Express, IBM, Toyota, McDonald’s. While some part of their operations are necessarily private they don’t have a culture of secrecy. Where do you want your company to be in 20 years?

For another perspective check out what Robin wrote a while ago at Snarkmarket on iPhone, Secrecy and Excellence

Credit Crisis Explained

A number of people have asked me if there is a simple explanation of the financial crisis. It is difficult to give a simple explanation that doesn’t paint the exclusive cause as naive greed. The credit crisis is one contributing factor to the financial crisis (I see these as two different issues).

I see four major factors as contributing to the credit crisis.

  1. Poor quality loans on high risk mortgages and lending practices
  2. Securitized high risk loans tainted asset pools that investors purchased
  3. Easy money to avoid a recession since dot crash
  4. Unchecked naked short selling in the market (allegedly by hedge funds)

When the asset inflation driving US housing bubble stopped, it’s like the music stopped in musical chairs. The scramble to get out drove prices further does and undermined asset prices further.

Here is a funny and slide show that explains the first point

Credit Crisis Pictualized

View SlideShare presentation or Upload your own. (tags: presentation comic)

People+Company Connections

I’ve been playing around with the social web for a while now. One of the things I’m interested in is how people are connected through organisations. For examply take the Australian Stock Exchange, there are about 1800 companies listed on the ASX all of which have a board of directors. Many directors sit on more than one board. So how do I find out who sits on what board?

I’ve maintained a private database in the past but I’m thinking of making it publicly available, in which case I should then wiki-fy it so that people can update it.

One place to build it is Cogmap which lets you create and share organization charts in a wiki-like manner. Alternatively there is Jigsaw a collaborative people and business directory with social media elements (invites and points).

I’m not sure which way to jump, but I want to seed my data and then let the users improve it. Then open the data further with to allow interesting and unplanned uses to emerge – like draw a map of 500 most powerful/influential board members in a country ranked by the market capitalization of their companies. This is sort of like They Rule without the Marxist-Leninist slant. They Rule allows you to create maps of the interlocking directories of the top companies in the US in 2004.

I definitely will build this. If you have suggestions I’m all ears.

Moving on from Oldfields

I’ve moved on from my role as Divisional Manager – Treco Garden Sheds at Oldfields Holdings Limited. At the end of my two year contract and am very happy with the results we achieved. The Directors’ Operations Review in the Preliminary Final Report to the Australian Stock Exchange for the year ended 30 June 2008 says:

Treco Garden Sheds

The Garden Sheds division performed well. This business is a solid contributor to the Group. This was assisted by the division’s management focus on better manufacturing efficiency. The company congratulates the Management for their Group contribution.

I’d like to thank my team at Treco for all their hard work and support over the last two years. Without them it wouldn’t have been possible to make record divisional EBIT in each of those two years. Thanks to Ian C, George D, Les J, Mario A, as well as my fellow ex-Treco’s Susan R and Brett C.

In manufacturing, I’d like to thank the production team: Tan Dat Ho, Minh, Frank, Ted, Ho, Tan Dat Ha, Suri, Michael T, Noelene, Toni, Neil, Mark, Maurice, Micko, Mick C, and Gabriel.

What did we do?

  1. Focused on low hanging fruit, grab what orders we could without huge retooling.
  2. De-hassle the workflow. We spent time and effort removing obstacles from our processes.
  3. Use subject matter experts. I didn’t tell them what or how to do it, I set the goal and trusted them to find a way. Then I cheered from the sidelines. This worked for both sales and manufacturing experts
  4. Use common sense. Just because we’ve always done something doesn’t mean we should still do it. Everyone can ask “why are we doing this?”

I will do a personal WWW/TALA on this over the next month (What Went Well/Take A Look At). Manager Tools podcast by Mike Horstman and Mike Auzenne taught me that acronym.

Anyway on the the next challenge which is with a fast growth firm. More later.

Private Company Valuations

An unreal valuation is a price that a strategic investor pays because they have non financial objectives.
Fred Wilson A VC via twitter

That really puts the concept of the Strategic Sale succinctly. When the fit of the vendor’s business to the acquirer is so compelling, that traditional accounting based measures are not sufficient.